Mumbai, Jun 20 (PTI) RBI Governor Sanjay Malhotra suggested that a change in monetary policy stance to neutral will provide the necessary flexibility to the central bank to 'cut, pause or hike policy rate' in response to the evolving domestic and global economic conditions, as per the minutes of the rate-setting panel meeting issued on Friday.

On June 6, the RBI governor-headed six-member panel reduced the benchmark short-term lending rate by 50 basis points, taking the total reduction to 100 bps in quick succession, besides a change in the policy stance to neutral from accommodative.

"This package of measures will provide some certainty in times of uncertainty and is expected to support growth," Malhotra said during the three-day meeting of the Monetary Policy Committee (MPC).

While five members voted for a 50 bps reduction in the repo rate, an external member of the panel, Saugata Bhattacharya, suggested a 25 bps cut. PTI NKD CS NKD BAL BAL

Monetary policy neutral stance enables flexible rate action to respond to evolving economic conditions and support growth. A change in monetary policy stance to neutral was adopted to provide the central bank flexibility to cut, pause or hike the policy rate in response to evolving economic conditions. The Monetary Policy Committee combined a reduction in the benchmark short-term lending rate with the shift from accommodative to neutral, citing the package as intended to support growth amid uncertainty. The minutes record a majority vote for a larger rate cut and a dissent by an external member who preferred a smaller reduction.